Vectren Corporation (NYSE: VVC) and Piedmont Natural Gas (NYSE:PNY) are both utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.
Analyst Ratings
This is a summary of current ratings for Vectren Corporation and Piedmont Natural Gas, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vectren Corporation | 0 | 0 | 3 | 0 | 3.00 |
| Piedmont Natural Gas | 0 | 0 | 0 | 0 | N/A |
Vectren Corporation currently has a consensus price target of $66.00, indicating a potential upside of 9.76%. Given Vectren Corporation’s higher probable upside, research analysts plainly believe Vectren Corporation is more favorable than Piedmont Natural Gas.
Valuation and Earnings
This table compares Vectren Corporation and Piedmont Natural Gas’ top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Vectren Corporation | $2.59 billion | 1.93 | $668.60 million | $2.70 | 22.27 |
| Piedmont Natural Gas | N/A | N/A | N/A | $1.72 | 34.90 |
Vectren Corporation has higher revenue and earnings than Piedmont Natural Gas. Vectren Corporation is trading at a lower price-to-earnings ratio than Piedmont Natural Gas, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
64.6% of Vectren Corporation shares are held by institutional investors. Comparatively, 61.5% of Piedmont Natural Gas shares are held by institutional investors. 0.1% of Vectren Corporation shares are held by insiders. Comparatively, 1.4% of Piedmont Natural Gas shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Dividends
Vectren Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.8%. Piedmont Natural Gas pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. Vectren Corporation pays out 62.2% of its earnings in the form of a dividend. Piedmont Natural Gas pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vectren Corporation has increased its dividend for 57 consecutive years and Piedmont Natural Gas has increased its dividend for 38 consecutive years. Vectren Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Vectren Corporation and Piedmont Natural Gas’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vectren Corporation | 8.66% | 12.65% | 3.90% |
| Piedmont Natural Gas | 19.00% | 22.34% | 6.57% |
Risk & Volatility
Vectren Corporation has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Piedmont Natural Gas has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.
Summary
Vectren Corporation beats Piedmont Natural Gas on 8 of the 13 factors compared between the two stocks.
Vectren Corporation Company Profile
Vectren Corporation (Vectren) is an energy holding company. The Company segregates its operations into groups, including the Utility Group, the Nonutility Group, and Corporate and Other. The Company’s subsidiary, Vectren Utility Holdings, Inc. (Utility Holdings or VUHI), serves as the intermediate holding company for three public utilities: Indiana Gas Company, Inc. (Indiana Gas), Southern Indiana Gas and Electric Company (SIGECO) and Vectren Energy Delivery of Ohio, Inc. (VEDO). The Company, through Vectren Enterprises Inc. (Enterprises), is involved in non-utility activities in two primary business areas: Infrastructure Services and Energy Services. Infrastructure Services provides underground pipeline construction and repair services. Energy Services provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation, and combined heat and power projects.
Piedmont Natural Gas Company Profile
Piedmont Natural Gas Company, Inc. is an energy services company. The Company’s principal business is the distribution of natural gas to residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities, which are its wholesale customers. The Company operates through three segments: regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a natural gas distribution system. The regulated non-utility activities segment consists of its equity method investments in regulated energy-related joint ventures that are held by its subsidiaries. The unregulated non-utility activities segment consists primarily of its equity method investment in an unregulated energy-related joint venture that is held by its subsidiary.
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